Red Uptober: Why Bitcoin Just Had Its Worst October in Years

Core Insights - October, typically a strong month for Bitcoin, has seen a significant downturn, breaking a six-year streak of gains with a 3.69% drop from the start to the end of the month [2] - Bitcoin's price recently fell to $109,820, approximately 13% below its record high of $126,080 set on October 6, and has declined over 8% in the past 30 days [1][2] Market Conditions - The decline in Bitcoin's value occurred amidst challenging macroeconomic conditions, including concerns about liquidity and the reduced likelihood of a third interest rate cut, as indicated by U.S. central bank Chair Jerome Powell [3] - The market experienced a significant sell-off, with investors liquidating over $19 billion in positions, predominantly long positions, following escalated trade tensions between the U.S. and China [4] Contributing Factors - The negative performance in October is attributed to three main factors: a macroeconomic shock, a fragile internal market structure, and a lukewarm monetary policy signal [5] - Analysts noted that tightening liquidity conditions are impacting Bitcoin more acutely than other assets, as it is primarily driven by sentiment rather than fundamental factors like earnings or economic growth [5]